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The Sinocism China Newsletter 11.01.13

"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner

Today’s Links:

THE ESSENTIAL EIGHT

国企改革方案三中全会后出台 涉及央企拆分_网易财经report that SOE reform will be on the table at the Third Plenum, may include breaking up some central SOEs (like PetroChina?) // 知情人士表示，国企分类监管等将成为重点改革内容，涉及国企尤其是大型央企的拆分；境内国有控股上市公司高管股权激励不得超其薪酬40%的上限考虑放宽；优先股等资本市场工具有望在国资大幅撤出的领域派上用场；在国企重组上市的过程中，民资将获得更多参与机会。

Related:国资委副主任：十八届三中全会将对深化国企改革做新部署-财经网Deputy director of SASAC says that the Third Plenum will deepen SOE reforms // 据国资委网站消息，国资委副主任、党委副书记黄淑和近日表示，即将召开的十八届三中全会，将对进一步深化国有企业改革做出新的部署。黄淑和说，对此，各地国资委要高度重视，根据中央的决策部署，积极主动地研究本地区深化国有企业改革的总体思路和具体措施。要牢牢把握政企分开、政资分开的改革方向，立足现行国有资产管理体制，进一步完善以资本为纽带的国有资产出资人制度，夯实国有企业作为合格市场主体的体制基础。

孟建柱：东伊运组织指使天安门暴力恐怖袭击事件_资讯频道_凤凰网While on a visit to Uzbekistan, Meng Jianzhu tells PhoenixTV reporter that ETIM (东伊运恐怖组织) was behind the Tiananmen terror attack. A big focus of the Shanghai Cooperation Organization (SCO) is anti-terror. Will China get advice from Putin, especially his learnings from Chechnya, on dealing with the tensions in Xinjiang? It would be nice to know how folks in certain DC agencies view Monday’s attack, and ETIM in general // 核心提示：正在乌兹别克斯坦访问的中央政法委书记孟建柱，31日向上合组织地区反恐怖机构执委会通报日前在北京天安门发生的恐怖袭击事件。孟建柱在会后回答凤凰卫视提问时，明确指出这起恐怖袭击事件的幕后指使者，就是东伊运恐怖组织。孟建柱说，北京发生的这一起暴力恐怖事件，是一次有组织、有预谋的活动，它幕后的指使者就是盘踞在中亚、西亚地区的东伊运恐怖组织。

Related:Q. & A.: Philip Potter on the Growing Risk of Terrorism in China – NYTimes.com In a forthcoming paper for Strategic Studies Quarterly, Philip Potter, an assistant professor at the University of Michigan’s Ford School of Public Policy, writes that the dichotomy between China’s tough security posture in Xinjiang and the comparatively open society of the country’s east has created an incentive for attacks in cities like Beijing. In an email interview, he analyzed the history of separatist violence, the divide between the “two Chinas” and the likelihood that further crackdowns would exacerbate resentment in Xinjiang…”The grievances are certainly homegrown, but one of the key points I demonstrate in the article is that the Uighur situation is increasingly on the radar of the broader international jihadist community. The result is that some key voices in that community have started to call for attacks against China. Probably more importantly, Uighur militants have played an increasingly important role in organizations operating in Pakistan and Afghanistan, so the opportunity for links is certainly there.”

Related:Seeing a Turning Point for China’s Thinking on Terrorism – NYTimes.com Yang Jiemian, the president emeritus of the prestigious, government-financed Shanghai Institutes for International Studies, said that the attack was an important moment for Chinese domestic and foreign policy. “It will be quite a big impact on China – China will rethink its actual institutions and measures against terrorism,” he said Thursday in brief remarks after delivering a speech and taking questions in Hong Kong. “Tiananmen is symbolic, so this incident is symbolic.”

Related:国防部回应天安门恐怖袭击：军队必要时参与反恐_网易新闻中心MoD spokesman says that the PLA will participate in anti-terror efforts when needed // 中新网10月31日电 在31日的国防部例行记者会上，国防部新闻事务局副局长、新闻发言人杨宇军上校回应了天安门恐怖袭击，称中国军队在必要时将根据国家统一部署，打击各种暴力恐怖活动。

China slams ‘dangerous provocation’ by Japan by shadowing sea drill | Reuters Defence Ministry spokesman Yang Yujun said that a Japanese naval and air patrol disrupted a Chinese live ammunition military drill last Friday, without giving the precise location. Yang also said Japanese patrols of ships and aircraft were gathering information about the exercises. “Not only did this interfere with our normal exercises, but endangered the safety of our ships and aircraft, which could have led to a miscalculation or mishap or other sudden incident,” Yang told a news briefing. “This is a highly dangerous provocation, and China’s Defence Ministry has made solemn representations to the Japanese side,” he added, according to a transcript of his remarks on the ministry’s website.// accidents happen, very worrisome

Related:China dismisses Japan’s claims on military activities – Xinhua China said on Thursday that Japan should get accustomed to China’s reasonable and legitimate military activities rather than making groundless accusations, as it has done recently. Japan has repeatedly tried to create an atmosphere of war, making baseless accusations against the Chinese military’s activities while having to acknowledge that these activities are not against international laws, Defense Ministry spokesman Yang Yujun said at a regular news briefing. Yang’s comments came after Japanese Defense Minister Onodera Itsunori reportedly accused China on Tuesday of having “intruded” in the waters around the Diaoyu Islands, called the Senkaku Islands by Japan. / 国防部:日本舰机危险挑衅 强闯中方军演区_网易新闻中心

China Story Yearbook 2013: Civilising China 文明中华 | The China Story China Story Yearbook 2013 edited by Geremie R. Barmé and Jeremy Goldkorn with contributions from leading scholars, journalists and writers, and a rich range of translated material from Chinese sources related to politics, social change, urban transformation, law and order, international relations, the economy, global trade, the Internet, culture, major news stories and much more, was launched at the Australian National University by the Hon Judi Moylan on 31 October. This second yearbook, produced by the Australian Centre on China in the World, covers the period from mid 2012 to September 2013, during which the fifth generation of leaders assumed control of the Communist Party and the government of the People’s Republic.

China demands U.S. explain spying allegations linked to Australian missions | Reuters The Sydney Morning Herald said on Thursday that the intelligence collection takes place in Australian embassies across Asia, as well as other diplomatic missions, without most Australian diplomats knowing about it. “China is extremely concerned about this report and demands that the United States offers a clarification and explanation,” Chinese Foreign Ministry spokeswoman Hua Chunying told a daily news briefing.

China Debt Solution Seen Aided by Selling Listed Shares: Economy – Bloomberg China’s swelling local-government debt is spurring speculation that authorities could sell some of their holdings of listed shares, estimated by UBS AG to total at least 5 trillion yuan ($820 billion), to make repayments. Partial divestment of governments’ stakes in state-owned companies is one option to address the debt issue, said Yao Wei, China economist at Societe Generale SA in Hong Kong. Local governments have already made some sales over the past two years and repayment pressures mean that more are likely, said Chen Li, a Shanghai-based analyst at UBS.

Scientists say Chinese horseshoe bats spread Sars-like viruses | South China Morning Post Scientists said on Wednesday they had found evidence that Sars-like coronaviruses can jump straight from a type of Chinese bat to humans without the need for an intermediary animal “host”. The find has “enormous implications” for public health control, with potentially pandemic viruses present in bats in China that could cause another outbreak, said the authors of the study published in the journal Nature.

Air Pollution Drives 50% Drop in Visitors to Beijing – China Real Time Report – WSJ If the current trend holds, Beijing will see its first decline in inbound tourism since 2008, when much of the world was mired in financial crisis. One of the main factors in the decline, according to the paper: extreme air pollution in the first half of the year “hyped by foreign media.” The Great Wall, Tiananmen Square and other historic sites in and around Beijing still draw mobs of domestic and foreign visitors, but they are often wrapped in smog. Meanwhile, criticism of the capital’s suffocating air and congested traffic continues to spread. Though Beijing Youth Daily blames foreign news organizations for being overly critical, the newspaper’s sister state-run media outlets have been equally vocal.

THIRD PLENUM

‘Unprecedented’ Reforms Will Come from Party Meeting, Source Says – Caixin The source indicated the reforms will be comprehensive, covering the economy, politics, culture, society and the environment. This echoes remarks the party’s general secretary, Xi Jinping, made this month. Information from an October 29 meeting of the 25-member Politburo chaired by Xi indicated that a document discussing major decisions about deepening reforms is being circulated among officials and policy advisers. A revised version of that document will be put forward at the upcoming plenum. A source who participated in the drafting of that document said the proposals cover a much wider range of topics than landmark reform guidelines issued at similar party meetings in 1993 and 2003.

Exclusive: China securitization plan expanded to include foreign banks – sources | Reuters Chinese regulators have expanded a pilot plan allowing banks to package loans into tradable securities to include foreign banks, sources said. Chinese policymakers see securitization as a tool to shift risk away from the banking system to reduce the chances of a financial crisis as economic growth slows and bad loans rise. Securitization would also help satisfy voracious investor demand for alternatives to the chronically weak stock market and frothy property sector.

China’s Alibaba to launch online fund sales service: media | Reuters Alibaba Group Holdings has secured approval from the China Securities Regulatory Commission (CSRC) to act as a third party for the online sale of fund products, local media group Caixin reported on its website. The fund products will soon be available on Alibaba’s Amazon-like Taobao website, according to the report.

Chinese carmakers narrow quality gap with global brands | Reuters GAC Motor, which sells cars under its own brand Trumpchi, had 97 problems per 100 newly sold vehicles in a survey published on Thursday by market-research firm JD Power & Associates. That was better than the average 119 problems and beat global names such as General Motors Co’s (GM.N) Buick and Chevrolet, Ford (F.N), Nissan (7201.T) and Honda (7276.T).

China Brands Follow Dior to Paris Seeking European Glitz: Retail – Bloomberg Shanghai Woo, a homespun Chinese maker of scarves, plans outlets in Paris, London, Milan and New York over the next three years. Bosideng International Holdings Ltd. (3998), seller of 500 yuan ($82) down jackets in China, is counting on a new store in London’s South Molton Street to lend it some allure. Hong Kong-listed Trinity Ltd. (891) this year started selling its Kent & Curwen menswear line at New York’s Bloomingdale’s.

FTZ to be template for change[1]|chinadaily.com.cn The government will be “prudent” in introducing policies in the zone, said Long Guoqiang, director-general of the General Office of the Development Research Center of the State Council. Long said that the approval of new zones elsewhere in the nation “will not be related to the progress” of the Shanghai FTZ. “The Shanghai FTZ will be the pilot and explorer of China’s economic upgrading,” Long said. “In addition to liberalization of trade and tariffs, a very important part of the pilot is the opening of the service sector.

POLITICS AND LAW

China to probe newspaper in defamation case | Reuters The press regulator’s branch in the southern province of Guangdong, where New Express is based, had stripped Chen of his official reporting credentials, state radio said. It also ordered the publishers of the paper, the Yangcheng Evening News Group, to “carry out a full rectification” of New Express, “investigate the responsibility of the relevant staff and immediately revise its leadership”, the report added. Problems found to exist at New Express would be “further dealt with in accordance with the law”, it said, without providing further details.

任志强怒批胡锡进无思想司马南无人格_中国_多维新闻网Ren Zhiqiang’s new book sounds like it is worth reading // 【多维新闻】近日，经常在舆论中发表争议性观点而被称为“任大炮”的中共“红二代”、房产商人任志强接受媒体采访时点评时政，褒贬人物，炮声隆隆。任志强的评论涉及商人王石和潘石屹，红二代中的孔丹和秦晓，甚至是现任政治局常委俞正声和王岐山。最值得关注的是，任志强还以犀利、不留情面的语言大批“左派”代表性人物《环球时报》总编胡锡进、网络大V司马南和央视。

Chinese police block way to hometown of suspect in deadly crash – AJW by The Asahi Shimbun Seven police officers were seen on Oct. 30 examining vehicles on a mountain road in Shanshan county. The checkpoint was a 30-minute drive from the registered address of the suspect named by the Beijing Municipal Public Security Bureau. After examining a passport, one officer said in a harsh tone: “I see you are a journalist. We are pursuing a suspect and cannot permit you to go ahead anymore. Turn back.”

Collins gives China a lesson in combating corruption – National – NZ Herald News Justice Minister Judith Collins says she believes China is serious about clamping down on corruption under its new leadership after she was invited by the Chinese Government to speak to ministers and officials about New Zealand’s anti-corruption measures… She met with China’s Justice Minister Wu Aiying and Meng Jianzhu, a member of the China Communist Party’s powerful politburo, and spoke at the China Executive Leadership Academy, which was attended by senior Government leaders and business executives.

Chinese Officials Apologize for Gross Photoshop Ineptitude – China Real Time Report – WSJ “After this incident occurred, the picture was reproduced on all the major web portals and this had a negative impact on our city,” said Ningguo’s government in one of several statements posted on its website Wednesday (in Chinese).“For this reason, we have decided to publicly admonish the Civil Affairs Bureau and the person responsible, Xu Feiyu. We hope all departments will learn a lesson from this incident and be even more rigorous in checking the information they publish.” Officials said they really did visit Ms. Cheng, but acknowledged that the picture was altered using Photoshop, a program that is used to manipulate images.

FOREIGN AND DEFENSE AFFAIRS

Strident Video by Chinese Military Casts U.S. as Menace – NYTimes.com It is not clear if the video was intentionally released online or somehow leaked, but it began disappearing from Chinese websites on Thursday night. Its heavy ideological content and propaganda-style suggest it may have been produced to support the work of the military’s political commissars, who are charged with the ideological indoctrination of troops and maintaining their morale, discipline and loyalty. As such, the film appears to offer a remarkably straightforward glimpse into the Cold War mind-set of the Chinese military leadership, as well as the deep suspicions of the United States festering inside one of the most influential institutions in the Chinese political system.

Book Details Consideration of Replacing Biden on 2012 Ticket – NYTimes.com Mr. Huntsman’s son, former Gov. Jon M. Huntsman Jr. of Utah, is portrayed in perhaps the most negative light in the book. As Mr. Obama’s ambassador to China, he repeatedly assured top White House officials that he was not considering a Republican presidential bid, even as he was meeting with potential campaign strategists during a trip to his Washington home around Christmas 2010. And while Mr. Huntsman was in Beijing, his wife was exchanging emails with his eventual consultant, trying to be discreet about their political plans by referring to her husband only with the code word “HE.”

China, Malaysia To Hold Joint Military Drills | Defense News | defensenews.com China and Malaysia will hold their first-ever joint military exercises next year, the Southeast Asian nation’s defense minister said Wednesday, despite their rival claims to the tense South China Sea. The announcement by Hishammuddin Hussein, who is in Beijing to meet Chinese military leaders, follows a visit to Kuala Lumpur earlier this month by China’s President Xi Jinping, in which the two countries pledged closer ties.

HONG KONG, MACAO AND TAIWAN

Taiwan Quake Shakes Buildings in Capital – Bloomberg An earthquake measuring 6.3 on the Richter scale struck eastern Taiwan, shaking buildings in the capital and prompting the island’s biggest chipmaker to temporarily evacuate factory workers. One person was injured and there were no immediate reports of major damage. The 78-second tremor, felt islandwide, occurred at about 8:02 p.m. local time yesterday, according to a statement on the website of the island’s Central Weather Bureau. The epicenter was 52.9 kilometers south of the coastal city of Hualien and at depth of 19.5 kilometers, it said.

TECH AND MEDIA

58.Com Jumps in U.S. Debut as China’s Craigslist Appeals – Bloomberg The sale became the fourth and biggest initial public offering by a Chinese company in the U.S. this year, after web retailer LightInTheBox Holding Co. (LITB) raised $78.9 million in June, followed by China Commercial Credit Inc. and Montage Technology Group Ltd. The number of offerings has rebounded from a low of three in 2012 and is down from the 13 in 2011, data compiled by Bloomberg show.

China’s mobile phone sales surge in Q3 – Xinhua Some 102.66 million mobile phones were sold in China in the third quarter of 2013, according to a report released by a major tech industry researcher on Thursday. The figure indicated a 13.6-percent quarter-on-quarter increase, and a 54.5-percent year-on-year increase, showed Analysys International’s report. Among the total sales volume, 93.08 million of the phones were smartphones, up 20.7 percent quarter on quarter and 89.3 percent year on year. The share of smartphones on China’s mobile phone market grew to 90.7 percent, said the report.

马云：杀到企鹅家去_财经频道_一财网China Business News on the open war between Tencent and Alibaba, says the trigger is Jack Ma’s realization of the threat that Wechat poses to Alipay // 被业内预判已久的“阿里、腾讯必有一战”，也从暗战摆上桌面。导火索是“暗度陈仓”的微信——其偷偷潜伏在第三方支付领域。

China’s latest tough-as-nails media crackdown: the infomercial – Quartzwe’ll see// Starting Jan. 1, only one “television shopping advertisement” can air each hour, the General Administration for News Publication and Broadcasting said this week (link in Chinese), part of a larger push to “further strengthen satellite television channels.” The advertisement can’t be longer than three minutes, and the same ad can only be shown three times a day.

10 injured after quakes in NE China – Xinhua Ten people were injured when two earthquakes shook Songyuan City in northeast China’s Jilin Province on Thursday morning, said local government authorities. Those with serious injuries have been sent to local hospitals. A 5.5 magnitude quake hit the city at 11:03 a.m. The depth of the earthquake was eight kilometers, and its epicenter was located at 44.6 degrees north latitude and 124.2 degrees east longitude, according to the China Earthquake Networks Center.